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1. How should I choose
a venture capital investor?
2. In which types of companies
does Octane invest?
3. Does Octane invest
outside of Canada?
4. How much does Octane
typically invest in a company?
5. Does a Octane partner
always join a company's Board of Directors when Octane
makes an investment?
6. Does Octane prefer
to lead a round of venture capital investment?
7. Will Octane invest
in a company even if it is not the lead or co-lead investor?
8. Do you sign NDA Agreements?
9. What information does
Octane find most helpful in evaluating potential investments?
10. What are the key
decision criteria Octane uses to determine whether to
invest?
11. What is the investment
process at Octane?
12. After making an investment,
what does Octane do to support the growth of its companies?
13. How can I submit
a business plan to Octane?
14. What is a "Portfolio
Company"?
15. What is a “Partner”
of a Venture Capital Firm?
1. How should I choose
a venture capital investor?
Management should carefully assess the
value-add of potential investors, seeking VCs who have
been in the business a long time, have a proven track
record of solid successes and a network that will serve
a company well throughout its growth. Additionally,
management should look for partners with relevant experiences
and relationships, who share a similar operating philosophy
and understand the market in which the company operates.
Further, it is important to Octane that
a company chooses a set of investors who can add value
as a company requires in its different stages of growth.
We look for co-investors with a similar philosophy,
track record, network of appropriate contacts and commitment
to the long-term success of the venture.
2. In which types of companies does
Octane invest?
Octane invests primarily in early-stage
technology companies with the potential to lead in the
enterprise software, consumer services and communications
sectors. We do not invest in publicly traded companies
nor do we invest in any companies that are not technology-based.
3. Does Octane invest
outside of Canada?
Yes. We will look around the world for
leading edge technologies that can add value to the
oil and Gas industry.
4. How much does Octane typically
invest in a company?
Although the amount we invest is driven
largely by the opportunity, our typical initial
investment is $1-3 million. We generally also participate
in follow-on financing rounds
and assist in finding co-investors in these rounds.
5. Does a Octane partner
always join a company's Board of Directors when Octane
makes an investment?
n most cases, yes. In our experience,
active participation on a company's board helps us to
maximize our contribution to the company's long-term
growth.
6. Does Octane prefer to lead a round
of venture capital investment?
Yes. By leading the round, Octane plays
a major role in setting the terms of the investment,
the amount of money invested and also helps select other
investors to join in the funding.
We feel that by leading a round or by being part of
the lead group, we can add the most
value and have the most impact.
7. Will Octane invest in a company
even if it is not the lead or co-lead investor?
Yes.
8. Do you sign NDA Agreements?
Octane Venture Partners receives a steady
stream of new business plans each week. Without these
new opportunities, our ability to make new investments
would decrease substantially.
If we were to divulge the secrets of confidential business
plans, not only would we destroy our relationship with
entrepreneurs, we would also damage our reputation in
the market. Thus, we take pride in our ability to protect
the secrecy and security of each entrepreneur who presents
us with a business plan. Using NDAs to protect secrecy,
however, presents problems for us on two levels.
First, with the volume of deals that we see every year,
such NDAs would quickly limit our ability to look at
new plans and thereby limit our ability to invest. The
problem is particularly acute when one considers that
most of our businesses are in the narrow range of technology
opportunities, so the likelihood of some overlap in
business opportunity increases greatly. Second, the
legal steps required to execute NDAs significantly lengthen
the amount of time it takes our investment professionals
to respond to entrepreneurs.
If you are ready to send us a business plan and are
concerned about our NDA policy, please do not include
the detailed technical specifications for your product
or service in your plan. Like most investment professionals,
we are more interested in the background of the individuals,
the size and scope of the market opportunity and the
general problem that the product or service addresses.
Any ideas or other material submitted by you will be
treated as having been submitted on a NON-CONFIDENTIAL
basis whether or not such ideas or other material are
marked or referred to by you as confidential. Octane
Venture Partners will have no duty to treat such ideas
or other material as confidential. Octane Venture Partners
will pass on any ideas or other material submitted by
you to our venture capital partners. Again this will
be on a NON-CONFIDENTIAL basis.
9. What information
does Octane find most helpful in evaluating potential
investments?
For initial consideration of a potential
investment, we prefer to receive a 2-3 page
Executive Summary that addresses the following areas:
- Brief description of the product or service.
- Market need, size and competitive landscape.
- Company/product positioning.
- Customer and customer acquisition strategy.
- Background of key management.
- Development stage of company including milestones
met and set.
- 3-year financial projections summary.
- Capital requirements and current capitalization
structure.
10. What are the
key decision criteria Octane uses to determine whether
to invest?
We invest in technology companies with
the following attributes
- Strong customer value proposition, large market
opportunities and a solid go-to-market strategy.
- Great technology.
- Sustainable competitive advantages through highly
differentiated, superior products or services positioned
to dominate emerging markets.
- Exceptional entrepreneurs with a clear vision of
the business, a passion for the technology and its
long-term potential, the energy to build an enduring
enterprise and the ability to execute
11. What is the investment process
at Octane?
We receive hundreds of business plans
a year, therefore the key to getting a plan accepted
by Octane is to have a sponsor within our partnership.
You can improve the likelihood of funding by getting
a sponsor. Sponsors come in many forms but generally
people from Producers, Service Companies, Attorneys,
Investment Bankers, Entrepreneurs or Accountant who
are familiar with our process can provide a lot of help.
Once sponsored, the partnership does due diligence on
your markets, customers and prospects, you present your
business plan, term sheets are agreed on and financing
and a long-term working relationship begins.
12. After making an investment,
what does Octane do to support the growth of its companies?
Octane has a team approach towards our
portfolio companies. Our Partners are active on our
portfolio companies' Boards of Directors. We work with
companies to identify and attract Senior Management,
Directors, Service Providers, Customers, Channels, etc.
We also work with a variety of trusted Partners to create
new opportunities for our investees.
13. How can I submit
a business plan to Octane?
Having a contact into Octane through
one of the partners is the best way. We also leverage
our contacts with attorneys, investment bankers and
serial entrepreneurs. Although we prefer
to get business plans by e-mail, we do also accept business
plan submissions by fax, e-mail,
or surface mail. See contact information.
14. What is a "Portfolio
Company"?
Portfolio Company" is an industry
term that refers to companies in which venture capitalists
invest. Such companies are said to be held "in
the portfolio" of the venture capital fund.
15. What is a “Partner”
of a Venture Capital Firm?
An individual who assumes responsibility
for managing a venture capital fund and selecting companies
in which to invest is called a "Partner” |
